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2023 (4) TMI 921 - AT - Service TaxLevy of Service Tax - Joint venture - expenditure incurred by the appellant, in respect of its employees and assets which were deployed for undertaking joint operations at the blocks, where it was acting as the Operator - consideration for rendering taxable services of supplying manpower and as also providing support services - period April 2014 to June 2017? - HELD THAT:- The PSC is a classic example of a public private partnership, where each of the co-venturers contributes to the success of the venture in their own way and work towards enhancing the benefits flowing therefrom. Under the PSC, the Government of India brings on the table the block which could potentially hold crude and/or natural gas, while the technical and financial contribution is made by the PI Holders. There is also a management committee which is constituted comprising of members from the Government of India as also the PI Holders which has to interalia approve the annual work programs as also the budgets for undertaking the same. Further, the profits arising from the venture are to be shared between the Government and the PI Holder in accordance with the pre-defined percentage computed with reference to an investment-multiple on the cost incurred for undertaking the joint operation. This Tribunal has in the case of B.G. EXPLORATION & PRODUCTION INDIA LTD. VERSUS COMMISSIONER OF CGST & CEX., NAVI MUMBAI [2021 (10) TMI 306 - CESTAT MUMBAI] has considered a similar arrangement under another PSC between the Government of India and B.G. Exploration and Production India Ltd., ONGC and the appellant and after taking note of the policy underlying the execution of the PSCs as also the terms and conditions of the same, concluded that there was a joint venture between the GOI and the PI Holders. It is also agreed with the observations of the findings of this Tribunal in the other decision of BG EXPLORATION & PRODUCTION INDIA LTD VERSUS COMMISSIONER OF SERVICE TAX (AUDIT-I) MUMBAI [2020 (10) TMI 579 - CESTAT MUMBAI] wherein, it has been held that the joint operations undertaken under the PSC does not result in rendition of any service as there is no beneficiary entity outside the PSC to which the joint operation are subordinated. It has been held that the cost incurred towards the employees which has been deployed towards the joint operation is a capital contribution to the venture and not a consideration to the rendition of any service. There is neither any service rendered by the Appellant nor is there any consideration involved in the appellant’s deploying its man power and assets for furtherance of the operation of the joint venture - It is not as if the joint venture had specifically for a consideration engaged the appellant to provide manpower. Infact, the appellant had as a co-venturer, in furtherance of the venture as its capital contribution to the venture, deployed manpower and assets for its own benefit and in the furtherance of the venture. This cannot, by any stretch of imagination, be regarded as a service being provided, so as to attract levy of service tax. The demand raised in the impugned order cannot be sustained - Appeal allowed - decided in favour of appellant.
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